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Fiftieth session
Agenda item 33
INTERNATIONAL ASSISTANCE FOR THE REHABILITATION AND
RECONSTRUCTION OF NICARAGUA: AFTERMATH OF THE WAR
AND NATURAL DISASTERS
Report of the Secretary-General
I. INTRODUCTION
1. At its forty-ninth session, the General Assembly adopted resolution
49/16, of 17 November 1994, entitled "International assistance for the
rehabilitation and reconstruction of Nicaragua: aftermath of the war and
natural disasters". In that resolution the General Assembly, concerned at
the negative impact that recent natural disasters and external debt burden
might have on the country's attempts at recovery, requested the Secretary-
General, in cooperation with the relevant organs and organizations of the
United Nations system and in close cooperation with the Nicaraguan
authorities, to continue to provide all necessary assistance to activities
for the reconstruction, stabilization and development of the country.
2. In its related resolution 49/137 of 19 December 1994, entitled "The
situation in Central America: procedures for the establishment of a firm
and lasting peace and progress in fashioning a region of peace, freedom,
democracy and development", the General Assembly expressed its approval of
the establishment of a support group for Nicaragua, which, under the
coordination of the Secretary-General, is playing an active role in
supporting the country's efforts towards economic recovery and social
development.
3. The present report is submitted pursuant to paragraph 7 of General
Assembly resolution 49/16.
4. It will be recalled that at the end of the last decade Nicaragua was in
a state of internal war, aggravated by an international confrontation that
led to an economic blockade and commercial embargo. The agreements reached
by the Central American Presidents in the Presidential Summits of
Esquipulas I
Notes
See Official Records of the Security Council, Fortieth Year, Supplement
for April, May and June 1986, document A/40/1119-S/18106, annex. and II,
Ibid., Forty-second Year, Supplement for July, August and September 1988,
document A/42/521-S/19085, annex.
----- played an important role in the termination of the conflict. Its
95-30453 (E) 231095/...
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peaceful resolution was also supported by the United Nations and the
international community.
5. Internationally monitored elections in February 1990 led to the
peaceful transfer of the presidency to an opposition party, for the first
time in Nicaraguan history, on 25 April 1990. The new Government of
National Reconciliation embarked on a complex process of transition: from
war to peace, from a centralized to a market economy, from an authoritarian
regime to a participatory democracy, from poverty to development and from
international isolation to political and economic reinsertion. During the
five years since the presidential elections Nicaragua has made substantial
achievements in several of these areas, with the last year registering
notable progress in the areas of reconciliation, macroeconomic
stabilization, the consolidation of democracy and the organization of civil
society. However, delays in other areas may have hindered the process as a
whole.
6. Pacification has advanced significantly, and in 1995 for the first time
there are no politically motivated armed groups in Nicaragua. More than
20,000 members of the Nicaraguan Resistance have been demobilized and the
army has been reduced from 92,000 combatants to 12,500, the smallest in
Central America. Although there remain armed groups opposed to the armed
forces which maintain some relationship with political parties, they are
essentially motivated by personal gain. The acts of violent protest in
urban areas noted in earlier years have also significantly diminished.
7. Following the end of the conflict, about 350,000 displaced persons and
refugees returned to Nicaragua. In the framework of the International
Conference on Central American Refugees (CIREFCA), large projects were
implemented to support demobilization and pacification in the former
conflict zones. A further stage saw the rehabilitation and development of
agricultural and livestock production through development programmes such
as the Programme for Displaced Persons, Refugees and Returnees in Central
America (PRODERE). However, integral reintegration (social, productive,
political, etc.) was hampered by diverse factors, including the
institutional weakness of the Government, insufficient coordination of
resources and economic stagnation.
8. The country enjoys a level of political freedom greater than at any
moment in its history and significant advances have been made in the
institutionalization of its democracy. Although progress in this area was
tested by months of dispute between the legislative and executive branches
of government over reforms to the 1987 Constitution, the agreement reached
on 15 June 1995 and the promulgation of the constitutional reform by the
President of the Republic on 4 July, represent important advances in the
consolidation of democratic procedures, clearing the way for the November
1996 elections. The transformation of the Sandinista Army into a new
National Army, subordinate to civil government, was underlined by the 21
February 1995 transfer of command from General Humberto Ortega to General
Joaquin Cuadra. Organizations of civil society in economic, trade union
and other social groups abound. At the local level, under a Ministry for
Social Action (MAS)/United Nations Development Programme (UNDP) project,
municipal development committees have been established in 120 of the
country's 143 municipalities. However, the full reintegration of
demobilized combatants and increased confidence in democratic institutions
remain outstanding goals of significance for the stability of Nicaragua's
democracy.
9. The complex issue of property has discouraged the investment needed for
economic development, compromised the rule of law and jeopardized the flow
of external assistance. Progress made towards the resolution of the issue
is therefore to be welcomed. The Government has reviewed the
expropriations and confiscations carried out by its predecessors, with a
view to the possibility of restitution or compensation. To this end in
January 1995 the Department of Property was established in the Ministry of
Finance. Difficulties in bringing the administrative procedures involved
to a rapid conclusion are compounded by the fact that the current structure
of the judiciary is such that it lacks resources to deal with the
anticipated volume of cases (around 6,000). A Conference on Property in
Nicaragua, held on 4 and 5 July 1995 and co-sponsored by the Carter Center
and UNDP, further facilitated progress on the issue as it produced
agreements between the broad range of participants on: security for
occupants of small rural and urban properties; speedy and fair compensation
for victims of confiscation, including revaluation of bonds; and the need
for occupants of large urban properties to pay to receive titles.
Subsequent to a proposal made at the Conference, a joint committee bringing
together members of the Government, the Legislative Assembly, victims of
confiscation, beneficiaries, bond holders and agricultural associations was
established in order to follow up on its agreements. UNDP serves as the
secretariat of this committee.
10. In the economic field, macroeconomic stabilization has been achieved
through control of the hyperinflation of the late 1980s and the elimination
of major economic distortions. The framework for a market economy has been
put in place and signs of recuperation are beginning to emerge. The year
1994 saw inflation of 12 per cent while GDP, stagnant since 1990, recorded
a 3.2 per cent increase to reach US$ 1,844 million (Central Bank).
However, stabilization remained dependent on external aid, which reached
US$ 563 million in 1994 (Ministry of External Cooperation), and underpinned
by Nicaragua's daunting level of external debt. At US$ 11,700 million at
the end of 1994, the debt was more than six times GDP and higher per capita
than anywhere else in the world. Debt-servicing absorbed 60 per cent of all
exports of goods and services (Ministry of External Cooperation). Although
exports of goods are still below imports, they were up by 28.8 per cent, to
US$ 344 million (Central Bank), a rise that was in part attributable to a
hike in the price of coffee, but also to growth in the fishing industry,
meat production, free zone and non-traditional agricultural products. The
trade deficit came down nearly 5 per cent, to US$ 428 million (Central
Bank). It is to be hoped that progress in the property issue will lead to
an upturn in the otherwise stagnant investment climate.
11. Support has come from the international community in the renegotiation
of Nicaragua's external debt and in the pledging of continued assistance.
Paris Club creditors agreed in March 1995 to a reduction of 67 per cent in
Nicaragua's debts with member countries. This amounts to a markdown of US$
862.2 million, out of a total of US$ 1,667 million (Ministry of External
Cooperation). Denmark, Spain, Italy and France have granted additional
unilateral debt reductions and Austria is submitting a similar measure to
its legislature. Negotiations are also under way to buy back Nicaragua's
US$ 1,700 million commercial debt, for the purchase of which Germany, the
Netherlands, Sweden, Switzerland and financial agencies have already
committed US$ 120 million. Participants in the Consultative Group Meeting
for Nicaragua, held in Paris on 19 and 20 June 1995, confirmed their
ongoing support of Nicaragua's transition process with commitments of US$
560 million for 1995 and US$ 1.5 million for 1995-1997, intended to offer
relief of Nicaragua's balance-of-payments gap over the next three years.
12. As political and macroeconomic problems are overcome, the
deteriorating social situation is becoming the main obstacle to the
Nicaraguan transition. Growth in last year's GDP was not reflected in per
capita income due to an annual increase in population of 3.7 per cent, the
highest in America. Since 1990 per capita income has declined by some 10
per cent. An estimated 20.2 per cent of the economically active population
are unemployed in 1995, with underemployment running at 33.7 per cent
(Central Bank). Poverty is widespread, with 55.7 per cent of the
population classified as being in a situation of poverty, and 22.6 percent
in extreme poverty (MAS, 1993). The vast majority of those classified as
poor and extremely poor live in rural areas.
13. For the moment, however, the main threat to democratic governance lies
not in political conflict, but in the difficulty of the conditions of life
and the subsequent loss of faith in democracy and its institutions. That
the social situation has not seriously endangered the democratic process is
due, in part, to the strong tradition of organization and social discipline
of the Nicaraguan people, reinforced by the fact that the Nicaraguan poor,
especially small and mid-scale agricultural producers (who sow 75 per cent
of the country's cultivated area), possess a large volume of productive
resources. Social difficulties, however, are manifested in begging,
prostitution, the break-up of families and the rise of common crime, in
some instances perpetrated by small and irregularly armed bands. The
improvement of social conditions, particularly in rural areas, remote
regions of the Atlantic Coast and among former combatants and displaced
persons, is therefore an urgent requirement for the establishment of
lasting conditions of public security. Seizures of drugs and incidence of
arms trafficking are increasing notwithstanding the scanty resources
available to the armed forces.
14. While the Nicaraguan transition has progressed, serious challenges
remain to be tackled. Among them are the recovery of output and
improvement of the living conditions of the population as a whole; the
finding of definitive solutions to the property issue and the problem posed
by the enormous external debt; the conduct of a clean electoral process
culminating in broad participation in the elections for President, Assembly
and local government in 1996; and the management of factors contributing to
the destabilization of Nicaragua, the region and the continent, such as
uncontrolled migration and trafficking in drugs, weapons and people.
15. Most Nicaraguans continue to support reconciliation and national
understanding. A 1994 survey on governance, conducted under the auspices
of UNDP in 1994, revealed that 93.7 per cent consider a broad national
agreement indispensable, and 73.3 per cent consider it feasible. However,
as shown in this and other surveys, confidence in democratic political
institutions such as State branches and political parties has not yet taken
root, due to a large extent to the lack of a democratic tradition and the
stagnation of living standards since the beginning of the democratic
transition. A positive scenario for rapprochement between the people, its
Government and the political parties would be the definition, with broad
civil participation, of a national development strategy for the medium and
long term, to which the main political forces and the Government were
committed. In this context, the Support Group states in its 1994 report
that: "There is unanimity on the need for a broad agreement on the kind of
country to be attained, the kind of development to be encouraged and the
basic rules of the game that should prevail. All sectors consider that the
definition of a new national development strategy is both necessary and
timely."
II. ACTIVITIES OF THE UNITED NATIONS SYSTEM IN NICARAGUA
PURSUANT TO GENERAL ASSEMBLY RESOLUTION 49/16
16. The following describes the activities of the United Nations system in
Nicaragua during 1994-1995.
A. United Nations Development Programme
17. Activities to support reconciliation, pacification and democratic
governance include the following:
(a) Secretariat of the Support Group for Nicaragua. The Support Group
for Nicaragua, the establishment of which the General Assembly welcomed
with interest in resolution 48/161, paragraph 17, and expressed its
approval in resolution 49/137, paragraph 20, was set up in May 1994 and
consists of representatives of the Governments of Canada, Mexico, the
Netherlands, Spain and Sweden. UNDP serves as a technical secretariat to
this informal group, whose objectives are to follow closely the Nicaraguan
transition to peace, democracy and development, and to support internal
consensus-building in the country. In the second half of 1994 the Support
Group formulated an agenda in support of Nicaragua's transition process
that included: the improvement of the investment climate, particularly
through the resolution of the property question; the formulation of a
concerted medium- and long-term national development strategy; the
resolution of the problem of external debt. In addition, during the early
months of 1995, and at the request of the State authorities, the Group
facilitated initial negotiations on the constitutional dispute;
(b) Resolution of the property question. In October 1994 UNDP, guided
by the Support Group, began a project to expedite the procedures -
administrative, judicial and those requiring arbitration - necessary for
the resolution of the property question. The project was funded at US$ 3.7
million by UNDP and the Governments of Sweden, the Netherlands and Canada.
As a follow-up to the Conference on Property organized by the Carter Center
and UNDP on 4 and 5 July 1995, UNDP has undertaken to act as secretariat of
the Joint Committee on Property;
(c) UNDP projects in the former conflict zones, designed with an
integrated and participatory approach to demobilization and resettlement.
Among these are:
(i)The Development Programme for Displaced Persons, Refugees and
Returnees in Central America (PRODERE), implemented by UNDP in the former
conflict zone with funding from the Government of Italy, which completed
operations in June 1995. The sustainability of the programme has been
assured through its transfer to local development agencies. The second
half of 1995 will see the initiation of the Programme for Human Development
at the Local Level, which seeks to establish State/civil society
participatory organizations for local development throughout the country;
(ii)The National Reconciliation and Rehabilitation Programme (PRRN) of
the Ministry for Social Action which supplies productive inputs to
demobilized combatants from both sides who received land from the current
Government;
(iii)The project on support for the pacification process which attempts
to complete the reintegration of former combatants from both sides, with
the Ministry of the Interior ensuring the viability of the commitments made
to demobilized combatants and the Ministry for Social Action pursuing
activities to promote reintegration into productive society;
(d) Projects designed to facilitate the organization and transformation
of the Government. These include: Management Development Programme;
support for the Nicaraguan Public Administration Institute (INAP);
development and installation of a national public investment system and of
a foreign trade plan in the Ministry of the Economy and Development;
installation of an information system for decision-making (SIENIC) in the
Office of the Minister of the Presidency; building of national capacity for
the management of external cooperation (NATCAP) and restructuring of the
Ministry of External Cooperation; support for the formulation of
agricultural policies and programmes and agricultural statistics (food
security) in the Ministry of Agriculture; strengthening of the Ministry of
Finance and automation of the customs office; institutional strengthening
of the Ministry of Social Action.
18. Activities to support the rule of law and State reform include the
following:
(a) Strengthening of the judiciary. This project, which is to create
local courts in all municipalities throughout the country and improve the
technical capabilities and living conditions of judges, is being executed
by the Supreme Court of Justice with funding from Sweden/UNDP;
(b) Incorporation of human rights within military training. This
project, which was proposed by the Nicaraguan Army and is financed by the
Government of Sweden, provides preparatory assistance for the establishment
of a model for the education of military personnel in the observance of
human rights;
(c) Strengthening of local government. UNDP activities in this area
include a project for the improvement of municipal services, funded by the
European Union; the creation of a unified municipal land register system;
pilot projects for municipal disaster prevention and management systems;
and a pilot local development project being run in six towns;
(d) National population and housing census, including an agriculture and
livestock module. The census was conducted in April and May 1995 by the
National Institute for Statistics and Censuses (INEC) with technical
support from UNDP/United Nations Population Fund (UNFPA) and a grant from
the Inter-American Development Bank. Besides being designed to update the
existing 1963 data (all information gathered from the country's most recent
census in 1971 was destroyed in the 1972 earthquake; attempts to prepare a
census since 1980 were suspended due to conflict), the census had as a
subsidiary objective the institutional strengthening of the INEC. The
preliminary results will be available in October 1995 and the final results
will be ready in early 1996.
19. Activities to support education and culture include:
(a) The curriculum reform of primary, secondary and higher education,
being developed in coordination with the Ministry of Education and the
Council of Universities;
(b) Support for the Nicaraguan Women's Institute and non-governmental
organizations in the formulation of the Nicaraguan submission to the Fourth
World Conference on Women;
(c) Support for the Nicaraguan Institute of Culture in the formulation
of a national cultural plan, with the participation of several municipal
cultural centres, and for the rehabilitation of the National Palace of
Culture financed with equivalent funds from the Government of Japan.
20. Activities to support economic reactivation include:
(a) The rural financial services programme. Restricted access to credit
for the small- and medium-scale farmers cultivating three quarters of the
land in Nicaragua is a serious impediment to economic reactivation in the
countryside. UNDP has worked since 1993 to overcome this situation through
the design of and financial management training and provision of seed money
for a network of local rural financing organizations. As a result, the
programme of rural financial services for small- and medium-scale farmers,
which comes under the Office of the Ministry of the Presidency, will begin
functioning during the second half of 1995;
(b) Attenuation of the impact of structural adjustment on farmers and
manufacturers. Since 1991 UNDP has given assistance, with US$ 32 million
provided by the Government of Japan, for the import of raw materials and
inputs for production, including for enterprises recently privatized for
the workers. The sales, paid for in national currency and on soft terms,
generate funds which are being used in cooperation projects, such as the
national cultural plan and the rehabilitation of the Palace of Culture.
21. Activities to support community participation and improvement of
living conditions include:
(a) Support for the formulation of social policies and community
development (reactivacion solidaria) in the Ministry of Social Action;
(b) Support for the formulation of a national housing programme in the
Nicaraguan Housing Bank;
(c) Support for the project formulation unit of the Emergency Social
Investment Fund (FISE);
(d) A project with the Ministry of Social Action and Civil Defence, to
establish and put into operation a national disaster prevention and
mitigation system. It will include civil society and provide for the
establishment of the necessary legal basis and the drafting of a bill on
the subject.
22. Activities to support sustainable development and environmental
conservation include:
(a) Formulation of a national development strategy. Following an
initiative of the Support Group, during 1994 support was given to the
formulation of a national strategy for sustainable development using UNDP
funds. Agricultural associations have been included and are discussing
their proposals with the Government;
(b) The sustainable development network continues to share information
and promote discussion of environmental issues at the national, regional
and global level.
B. Specialized agencies and other bodies of the United Nations
system: contributions in different fields
23. The paragraphs that follow provide a brief description of
contributions by United Nations specialized agencies and bodies other than
UNDP.
1. United Nations Children's Fund
24. Within the context of the National Reconciliation and Rehabilitation
Programme, the programme of integrated basic services carried out in the
former conflict areas seeks to improve living conditions, particularly
those of women and children, by: strengthening community health networks,
developing participation at the local level and sensitizing municipal
officials to gender and empowerment issues; providing technical training
for primary health workers and health education for adults/heads of
household; providing for vaccination, supplies, construction of small rural
aqueducts, latrines and wells; the creation of preschool centres and
development of infant feeding programmes; and the promotion of children's
rights.
25. The programme for children in especially difficult circumstances
(Ministry of Education), which was originally geared to minors who were
victims of the war, is now directed at the population as a whole and
involves dissemination of information on children's rights, eradication of
violence against women and the strengthening of legislation and
institutions dealing with children, women and the family.
26. The water and sanitation programme, which was completed in December
1994, resulted in the building of nearly 700 water supply works and more
than 8,000 latrines, and the introduction of new well-digging technology.
Coordination between institutions and agencies was increased and the
methodology used in rural water and sanitation projects was standardized.
2. United Nations Capital Development Fund
27. The bridge over the River Jicaro was inaugurated on 14 October 1994,
opening up production possibilities within a rich agricultural region in a
former zone of conflict. Execution of this project has been entrusted to
local communities and authorities.
28. The project for the rehabilitation and extension of the aqueduct at
Quilali, a town in the same region which was a base for the Nicaraguan
Resistance, has been approved and will start in October 1995.
29. Also in the north is the project for the construction of the mini-
hydroelectric power station at Wiwili, which will provide energy to a group
of towns and will be operated jointly by the local authorities and
inhabitants.
3. World Health Organization/Pan American Health Organization
30. Activities to strengthen and decentralize the Ministry of Health
include: the review and reformulation of policies, strategies, plans and
programmes; increased social participation at the central level (health
council) and decentralization and increased participation at the local
level (integrated local health-care systems - SILAIS); the development of
human resources; new information flow technologies; the strengthening of
technology and human resources in hospital maintenance and basic services;
the strengthening of environmental management capacity in respect of
health, conservation and control of water resources, occupational aspects
and exposure to pesticides.
31. Specific areas of assistance include: the prevention, diagnosis,
treatment, and management of AIDS; the treatment of acute respiratory
infections in minors; maternity care, including training of birth
attendants, support for technical health units and increased community
participation; the preparation and dissemination of information on women,
health and development; immunizations; rational use of essential
medication; the establishment of a model mother and child care unit; the
prevention of acute diarrhoeal diseases and cholera; the improvement of
perinatal care; rehabilitation of the disabled; and malaria and dengue
control programmes.
4. United Nations Population Fund
32. Within the areas of reproductive health and family planning activities
include: the training, monitoring and supervision of auxiliary personnel
and the preparation of family planning materials for dissemination; the
training of medical students in family planning, sex education and social
demography; reproductive health education for adolescents and care for
rural adolescents; and community participation.
33. The area of population policies and education includes the formulation
of a national population policy; a population and housing census (together
with UNDP); education in population matters at the formal (teacher) and
non-formal (household head) level; the creation of the information system
on population affected by the war in Nicaragua (Organization for
International Migration).
5. Food and Agriculture Organization of the United Nations
34. FAO is running a programme on the conservation and management of
natural resources concentrating on reforestation with community
participation in mountainous areas.
35. Other activities include the provision of: assistance to the
Government in food security planning; training and technical assistance to
women farmers and to small-scale farmers in the use of fertilizers and
other inputs; and management training to small-scale producers and those
operating private irrigation systems.
6. World Food Programme
36. Food supplements are provided to preschool children in day-care
centres and to schoolchildren by means of a "nutritious biscuit". Food-
for-work programmes have been introduced in agricultural activities
involving the adoption of appropriate technology (see IFAD).
37. A programme for dairy development encourages small-scale dairy farmers
to expand by providing them with credit, using funds derived from donations
of dairy products.
7. International Atomic Energy Agency
38. The IAEA has collaborated with the Ministry of Health in the field of
medicine to provide in vitro and in vivo diagnosis and, in nuclear
medicine, by repairing equipment, installing services, training personnel
and providing cobalt for the treatment of gynaecological problems.
8. International Fund for Agricultural Development
39. The comprehensive agricultural development project for the poorest
farmers in the dry region of the north covers training, credit and
sustainable agriculture/soil conservation. The World Food Programme's
contribution is to provide food in exchange for participation in productive
activities or training. A similar programme will begin in the agricultural
area of the south towards the end of 1995.
9. United Nations International Drug Control Programme
40. UNIDCP is supporting the formulation of a national plan for drug
prevention and control in Nicaragua.
10. United Nations Educational, Scientific
and Cultural Organization
41. UNESCO is supporting the Ministry of Education in adapting the
educational curriculum to the needs of the development process and training
executive, teaching and technical personnel.
11. International Labour Organization
42. In addition to its training of labour leaders, ILO, together with the
Nicaraguan Institute for Training and Technology, supports practical
training directed specifically at the handicapped, women and small-scale
manufacturers and craftsmen.
12. United Nations Industrial Development Organization
43. UNIDO supports the establishment and operation of micro and small-
scale industries using the system of flexible specialization. It is
currently providing preparatory assistance for the formulation of an
integrated technical assistance programme which will encourage the transfer
of technology towards priority areas in the private sector.
13. United Nations High Commissioner for Refugees
44. UNHCR documents refugees who settled in Nicaragua and the repatriation
of others to their countries of origin.
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